Election Wagers: $47M in Los Angeles mayoral bets missed the mark

Spencer Pratt finished third in the June primary for Los Angeles mayor, a result that contradicted the heavy betting on prediction markets. Speculators wagered more than $47 million on the race, making it the most active mayoral contest of 2026. On the eve of the primary, one major platform listed Pratt’s chance of advancing to the runoff at 78 percent. He did not advance.

The divergence between market prices and actual voting results has drawn scrutiny from local officials. Dean Logan, the registrar-recorder for the Los Angeles County Clerk's Office, stated that prediction markets can add to confusion when users treat their projections as more authoritative than the votes being counted. The issue is not limited to Los Angeles. Data from the Anti-Corruption Data Collective shows that wagering on 2026 congressional elections has more than tripled the volume seen in 2024 races.

The mechanism for these discrepancies often involves short, sharp price spikes. Kalshi, one of the largest platforms, identified a specific incident on May 20. A trader spent $1.25 million on contracts favoring Pratt’s victory. This single order pushed the price of a "Yes" contract from 29 cents to 45 cents. The market corrected within nine seconds, but the temporary jump signaled a sudden increase in perceived probability.

ACDC analyzed similar patterns across other elections. In 167 congressional markets worth at least $100,000, about 23 percent experienced price spikes of 30 cents or more. One example involved Juliana Stratton, the Democratic nominee for Senate in Illinois. On March 3, two large purchases pushed her winning odds from 47 cents to 99 cents. The price eventually settled at 52 cents, five cents higher than the starting level. Stratton won the primary two weeks later.

The impact of these spikes extends beyond the traders. A study funded by the Brennan Center for Justice found that voters were between 10 and 20 percentage points more likely to believe a candidate would win if prediction markets favored that candidate, regardless of traditional polling data. The survey included 1,994 registered voters. This suggests that fleeting market movements can shape public perception of electoral outcomes.

Platforms argue that their models are generally accurate. Kalshi reported that candidates favored by its markets won roughly 90 percent of the time in U.S. elections since 2024. The company added transparency features in early October, including labels for low-activity markets and live trade feeds. Polymarket also launched a surveillance system to detect manipulation attempts.

Despite these safeguards, outsiders have limited access to trader identities. Shana Bautista, head of global intelligence at Polymarket, noted that obtaining information on specific transactions often requires a subpoena or search warrant. Both Kalshi and Polymarket U.S. are regulated by the Commodity Futures Trading Commission, which has rules against market manipulation. However, the public order books do not always reveal who is behind large, unusual trades.

The volume of trading continues to rise. Kalshi reports that viewers outnumber actual traders by a 5-to-1 ratio on midterm election markets. As the 2026 congressional elections approach, the gap between speculative betting and actual voter intent remains a point of focus for analysts and officials alike.